Paying student debt has been suspended during the pandemic, but the moratorium is about to expire.
“Student loan payments were initially paused nationwide in March 2020 under a moratorium enacted by then-President Trump, which has been extended several times under the Trump and Biden administrations,” The Hill says (story here).
During the 2020 campaign, advocates pressed for debt forgiveness, and Biden seemed to support writing off up to $10,000 per student, but Pelosi has insisted any write-off must be approved by Congress. Biden’s position now doesn’t appear to go beyond extending the moratorium, and even that may be coming to an end.
“We’re still assessing the impact of the omicron variant, but a smooth transition back into repayment is a high priority for the administration,” White House press secretary Jen Psaki said last week.
A couple days later, Cornell University said over 900 students at its Ithaca, New York campus were infected with fast-spreading Omicron, despite virtually all of them being vaccinated, and many have received boosters. The pandemic is nowhere near over; it’s merely starting its fourth (and not necessarily last) wave of mass infections.
In recent years, student loan debt has overtaken credit card debt, and how stands at about $1.7 trillion, The Hill says. Why? Two reasons. One, college has come to be seen as necessary to land middle-class jobs. This puts pressure on young people to get degrees, whatever the cost. Two, states sharply cut support for public colleges, which responded by raising tuition; this shifted a large chunk of higher education costs from taxpayers to students.
That’s part of the reason why the federal government stepping in with at least limited student debt relief would be fair. There are also substantial public benefits from subsidizing an educated population. Higher earners pay more taxes, so that money is returned as higher tax revenues. More importantly, to compete economically and militarily, America needs engineers, scientists, and other experts. It’s not smart to starve our society of degreed people at this time in history.
Nor is it reasonable to expect students to shoulder that large financial burden alone. Education has historically been subsidized in our country, and society as a whole has reaped benefits in terms of prosperity and national security. The abrupt cost shifting from states to students, a temporary measure for coping with state revenue declines during the Great Recession, involves no principle or ideology; it was done for purely pragmatic reasons. The federal government can — and should — make good that financial penalty heaped on students as a result of economic forces far beyond their control.
The alternative is not only to keep them in debt bondage much longer, but to discourage those who follow them from taking the college route. Our country can’t afford to lose their talent and potential this way.
Perhaps the Federal government should create university’s similar to the military academies that will accept and educate for positions in the Federal government for a number of years after graduation. The students would get some stipend, receive room and board while at school. Perhaps this would be enough to embarrass states or set up some competition for these students state support for state institutions would go up.
Maybe Amazon, Microsft ect should be encouraged to put their money on the table to educate their future engineers, lawyers, doctors, ect.
The road we are on will just mean those with a silver spoon will get to go to college and few others will be able to afford even a state school. The idea should be that high school prepares students for the world and most jobs. Perhaps high school should be 5 or 6 years rather than 4 as the world demands more skills as do employers who expect work ready employees they need not take any time to train. Many would do well in a trade school and employers would be better served by current or newly created trade schools rather than degrees. Employers today often ask for a much higher education level than many openings require and often do not pay an acceptable salary comparable to the education level they demand. There is nothing wrong with having a janitor with a doctorate as long as a high school graduate or even below can also get the job. [Edited comment.]
Some interesting ideas here. Just thought experiments, though. Companies used to train workers for lifetime jobs. All that is gone now.